What is Your Home Worth? A Look Into Automated Valuation Models
You are probably familiar with websites that have emerged in recent years that attempt to estimate what your home is worth. If you have used any of these tools you may have wondered where the number comes from, or why the price one website gave you is different from what another one gave you. So how are these online guesstimates configured?
Websites use computer programs designed to make home value estimates, or averages. These are known as Automation Valuation Models (AVM). The estimates these models configure are usually based on public records like you might find from your local Property Value Administration, or “PVA”, department. The problem with these types of models is the automated estimates calculated do not figure in important factors like the condition or uniqueness of a home. So, for example, if you have owned your home for 10 years and spent lots of time and money making upgrades and renovations, you have added value to your home, however that extra value is not always reflected in the estimates generated by AVMs.
Not every website uses the same model, which is why various sites rarely agree on the price your home is worth. This creates problems during negotiations since the seller will want to believe the most accurate website is the one that gave the higher estimate, however, the buyer will fight that the site that gave the lower estimate is the correct one. So which one is right? The truth is, home value estimates or “guesstimates” that you can get on various websites are helpful when you want to get ball park figures and an overall feel for the market, but when you go to list your home for sale, pricing decisions should never be based on a website’s generic analysis.
The responsibility of Realtors is to make sure you have as much information as possible to base your decisions on. An AVM estimate can give you an idea of your home’s value, but a comparative market analysis or CMA will best determine this number. Realtors have the experience, knowledge, and tools to provide you with a more comprehensive estimate based upon a visit to your home where no automation model can go.
We offer home value tools on our website at www.semonin.com/home-values.aspx. What makes our tools different from others is the engine. The home value automation tools we offer on Semonin.com are powered by Collateral Analytics. Collateral Analytics is the top rated automated valuation model for bank grade information. Banks rate them the best in the country for giving them information so they can make wise investment information.
We offer consumers two tiers of AVMs. The first we refer to as the Consumer AVM (CAVM) which pulls public records on a frequent basis to estimate a home’s value. The CAVM allows you to enter your address, or any residential address in the country, and instantly find loads of information right at your fingertips. You will find a range and an estimate of what a property is worth as well as comparative data for other homes nearby.
The second tier of home value automation available on our website is called an Interactive AVM, or I-AVM. The I-AVM takes home value estimation one step further and uses information from a variety of sources. This model combines public PVA records, local MLS data, and predictive economic modeling to provide what is called a “Bank Grade” automated value which is what lenders use in determining mortgage loans. To access the Interactive AVM visit www.semonin.com/home-values.aspx and click on the “Get Report Used by Lenders” link.